If business firms do not have to generate revenues sufficient to cover their sunk costs, does anyone have to pay for mistaken decisions?
A) No, because sunk costs are irrelevant.
B) No, because the past cannot be undone.
C) Only if they value their integrity or credit standing.
D) The entire economy ends up paying.
E) Yes. The people who committed resources to mistaken decisions pay the costs.
E
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When demand falls and supply stays the same, equilibrium price ______ and equilibrium quantity ________.
Fill in the blank(s) with the appropriate word(s).
Each firm in an oligopoly market knows that any change in its product quality, price, output, or advertising policy may prompt a reaction from its rivals. Each firm also may react if another firm alters any of these features
Indicate whether the statement is true or false
The total of all planned production for the entire economy is known as
A. aggregate supply. B. aggregate demand. C. aggregate expenditures. D. aggregate inflation.
When deciding on an appropriate course of action to counter a recessionary gap, which of the following do policymakers consider?
A. The slope of the short-run Phillips curve B. The costs of inflation and unemployment C. The efficiency of the economy’s self-correcting mechanism D. All of these responses are correct.